The Conveyancing Association has urged the Chancellor to favour stability over continued change when it comes to any Budget measures addressed at the housing and mortgage markets.
The Budget is due to see the publication of the final rules with regard to increased stamp duty land tax charges on additional properties. The Conveyancing Association has been critical of many aspects of the proposed rules and suggested there was a "large degree of arbitrariness" to key points, such as the 15 property rule which would see corporate landlords (and potentially individuals) exempt from the increase if they already owned, or were able to buy in one purchase, this number of properties.
The Association is hoping Osborne and his HM Treasury team, at the very least, water down the proposals if not scrap them entirely. It suggests that the spike in transaction levels, particularly in buy-to-let purchases, over the last three months has stretched all parties and has placed an unnecessary burden on conveyancers to meet an artificial deadline.
With reforms to pensions tax relief seemingly off the agenda, RSM - provider of audit, tax and consulting services - has warned that Osborne may be looking at other options for balancing the books.
RSM predicts that the government may raise the higher rate income tax threshold more quickly than planned, and also announce reforms to salary sacrifice and entrepreneurs' relief.
George Bull, senior tax partner at RSM, said:
"One area that we’ll be keeping a particularly close eye on is the development of the government’s plans for personal digital tax accounts, announced in last year’s March Budget. This will impose an obligation for individuals to file up-to-date information on their income with the taxman every three months. While attention has so far focused on taxpayers’ filing obligations, the changes could also be a cover for introducing in-year collection of tax payable – essentially bringing forward payments which would usually be payable in the year ahead. These changes could have a significant impact – particularly on the self-employed."
Eddie Goldsmith, Chairman of the Conveyancing Association, commented:
“Unsurprisingly, the conveyancing market is looking for a period of stability but I suspect we won’t be getting that post-next week’s Budget. The publication of the final rules for extra stamp duty charges on additional properties will be made available and one can’t help think there is likely to be some considerable confusion around them, not forgetting the fact of course that the conveyancing industry will have to cope with these changes from the start of April. The small amount of time this provides firms to ready themselves and to ensure all stakeholders in the market are clear on these new rules is, quite frankly, ludicrous.
“Not only would we like to see these additional stamp duty charges dropped, or at the very least, watered down but we feel any further change in the UK housing market, unless positively focused on areas like helping to increase property supply or supporting first-time buyers, will only add to the instability we (and many others) will have to cope with. We believe the Chancellor should allow the market time to breathe – in the CA’s view it is much better served by supporting steady transaction numbers, rather than the artificially-created spikes that have been far too prevalent. The last three months of increased buy-to-let transactions being a case in point. Instead, we would like to see the status quo – post-April – maintained and allow us to plan and prepare our resources adequately based on the market itself rather than deal with further uncertainty generated by ongoing intervention.”
